Is there a personal guarantee required as part of the Card My Yard Franchise Agreement?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
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The Franchise Agreement requires you to designate a "Principal Owner." Your Principal Owner is the main individual responsible for your business. Your Principal Owner must meet our qualifications and must be approved by us. Your current and future owners, including your Principal Owner, must sign a Guaranty and Assumption Agreement ("Guaranty"), guaranteeing your performance and binding themselves individually to certain provisions of the Franchise Agreement, including the covenants against competition and disclosure of confidential information, restrictions on transfer and dispute resolution procedures.
Under our franchise agreement, we will grant you the right (and you will accept the obligation) to operate one Card My Yard business providing yard greeting services and related products. We may periodically make changes to the systems, service menu, standards, facility, signage, equipment and fixture requirements for your franchised business.
Source: Item 22 — CONTRACTS (FDD page 84)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, a personal guarantee is required as part of the Franchise Agreement. The Franchise Agreement stipulates that all current and future owners, including the Principal Owner, must sign a Guaranty and Assumption Agreement, referred to as the "Guaranty." This agreement ensures that these individuals guarantee the franchisee's performance and are individually bound to certain provisions of the Franchise Agreement. These provisions include covenants against competition and the disclosure of confidential information, restrictions on transfer, and adherence to dispute resolution procedures.
Furthermore, the Principal Owner and any other owners are individually, jointly, and severally bound by all obligations under the Franchise Agreement. This means that each individual owner is responsible for the full performance of the franchise's obligations. If the franchisee is an individual, their spouse must also personally guarantee the performance under the Franchise Agreement. The personal guaranty agreement will be in substantially the form of Exhibit A to the Franchise Agreement.
This requirement has significant implications for prospective franchisees. It means that personal assets are at risk should the Card My Yard franchise fail to meet its obligations. Franchisees should carefully review Exhibit A to fully understand the scope and terms of the personal guaranty. It is also advisable to seek legal counsel to discuss the implications of signing such an agreement.